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Regulation a sore point for risk advisers

Risk-specialist financial advisers are optimistic about the long term viability of their practice, but regulatory burdens are still causing anguish within the industry, according to a Zurich survey.

The latest Risk Adviser Sentiment Index by Zurich Financial Services Australia found that 94.5 per cent of the respondents surveyed were now feeling considerably more positive about the future of their practice.

The survey, conducted by Beaton Research & Consulting, questioned 200 advisers actively writing life insurance.
Respondents were asked to indicate their sentiment across five areas of their business.

The results showed that overall sentiment had risen to 5.04, up from 4.89 in December last year.

While advisers stated they were more positive about future sales volumes and overall consumer demand for life insurance advice, adviser sentiment towards regulation had actually declined.

Only 26.5 per cent of advisers indicated they were feeling positive about this aspect of their business, while 49.5 per cent of advisers indicated a negative sentiment.

The regulatory aspect of financial advice was the only area that didn’t improve in sentiment in the results of this year.

General manager of retail for Zurich’s Life and Investments business, Phillip Kewin, said that 2013 had been a year of fatigue for many in the industry in terms of FOFA, the election and interest rates.

“What this latest research shows is that advisers are feeling more positive than they have for quite some time, and will enter 2014 with more energy and more optimism about the future of our industry and their roles as professionals and as business owners,” said Mr Kewin.

“Whilst the bedding down of FOFA and other regulatory issues is still causing angst for some, I think there is a strong sense that the new government will bring with it a degree of stability and certainty for our industry, which is reflected in more than 90 per cent of advisers feeling positive about the viability of their business over the longer term.”

The survey follows the announcement that ASIC will be conducting an industry-wide surveillance campaign of the risk advice sector.